United States of America v. LaPant et al

Filing 50

ORDER signed by District Judge Kimberly J. Mueller on 6/22/17 ORDERING that the court confirms a stay will not be imposed and DENIES defendants' motion to stay. This order resolves ECF Nos. 37 and 38 . (Becknal, R)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES,

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Plaintiff,

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No. 2:16-cv-01498-KJM-DB

v.

ORDER

ROGER J. LAPANT, JR., et al.,

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Defendants.

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This case is before the court on the motions to stay proceedings brought by

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defendants Roger J. LaPant and Goose Pond AG, Inc. LaPant Mot., ECF No. 35; Goose Pond

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Motion, ECF No. 37. Plaintiff United States opposes both motions. Opp’n, ECF No. 39. At

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hearing on defendants’ motions, Kimberly Almazan and Zachary Colbeth appeared for LaPant,

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Robert Soran and Ashley Boulton for Goose Pond, and Gregory Broderick and John Do for the

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United States. ECF No. 42. For reasons explained below, defendants’ motions are DENIED.

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I.

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BACKGROUND AND PROCEDURAL HISTORY
The United States filed a complaint against defendants on June 30, 2016, alleging

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they discharged pollutants into the “waters of the United States” without authorization in

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violation of § 301 of the Clean Water Act (CWA), 33 U.S.C. § 1311(a). Compl. ¶ 1, ECF No. 1.

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The United States seeks injunctive relief and civil penalties. Id. ¶ 2. On May 2, 2017, defendants
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filed a motion to stay this case, pending the resolution of the Ninth Circuit case denominated

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United States v. Robertson, No. 16-30178 (9th Cir. filed Aug. 1, 2016). Defendants anticipate

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Robertson will decide whether a prior Ninth Circuit case, United States v. Davis, 825 F.3d 1014,

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1020 (9th Cir. 2016), has had the effect of overturning N. Cal. River Watch v. City of Healdsburg,

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496 F.3d 993, 999 (9th Cir. 2007), which held that Justice Kennedy’s concurrence in the case of

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Rapanos v. United States¸547 U.S. 715, 767 (2006), provides the test for determining jurisdiction

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under the CWA. The United States opposes defendants’ motion. Opp’n. Defendants have

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replied. LaPant Reply, ECF No. 40; Goose Pond Reply, ECF No. 41.

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II.

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DISCUSSION
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Legal Standards
A district court has inherent power to control the disposition of the cases on its

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docket in a manner to promote economy of time and effort for itself, for counsel and for litigants.

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CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). The trial court may, “with propriety, find

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it is efficient for its own docket and the fairest course for the parties to enter a stay of an action

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before it, pending resolution of independent proceedings that bear upon the case.” Leyva v.

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Certified Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 1979). This rule applies whether

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the separate proceedings are “judicial, administrative, or arbitral in character, and does not require

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that the issues in such proceedings are necessarily controlling of the action before the court.” Id.

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The court’s inherent power is discretionary. CMAX, 300 F.2d at 268 (9th Cir.

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1962). In determining whether a stay is warranted, the court must weigh the competing interests

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resulting from granting or declining a motion to stay. Id. Among the competing interests are

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(1) the possible damage that may result from the granting of a stay, (2) the hardship or inequity a

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party may suffer in being required to go forward, and (3) the orderly course of justice measured in

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terms of the simplifying or complicating of issues, proof, and questions of law expected to result

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from a stay. Id. at 268; Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). Finally,

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“[t]he party requesting a stay bears the burden of showing that the circumstances justify an

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exercise of that discretion.” Nken v. Holder, 556 U.S. 418, 433–34 (2009) (citing Clinton v.

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Jones, 520 U.S. 681, 708 (1997); Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)). The court

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weighs the competing interests in this case below.

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B.

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Analysis
First, the court must balance the “possible damage [to plaintiff] which may result

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from the granting of a stay,” with “the hardship or inequity which [defendants] may suffer in

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being required to go forward.” CMAX, 300 F.2d at 268. If there is “even a fair possibility that

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the stay for which [defendants] prays will work damage to someone else,” then defendants must

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show “a clear case of hardship or inequity in being required to go forward.” Landis, 299 U.S. at

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255.

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The court must also consider “the orderly course of justice measured in terms of

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the simplifying or complicating of issues, proof, and questions of law which could be expected to

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result from a stay.” CMAX, 300 F.2d at 268. In reviewing this factor, the court is mindful of the

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imperative that the Federal Rules of Civil Procedure be “construed, administered, and employed

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by the court and the parties to secure the just, speedy, and inexpensive determination of every

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action and proceeding.” Fed. R. Civ. P. 1; see also Landis, 299 U.S. at 254–55, 57 (a court has

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the inherent power “to control the disposition of the causes on its docket with economy of time

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and effort for itself, for counsel, and for litigants” and “[h]ow this can best be done calls for the

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exercise of judgment, which must weigh competing interests and maintain an even balance”).

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Here, defendants contend a stay is warranted because Robertson is expected to be

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heard by the Ninth Circuit in the next four to six months. Goose Mot. at 13; LaPant Mot. at 10.

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Defendants also contend, should the case proceed, they will face unnecessary expenditures due to

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ongoing discovery. Goose Mot. at 12; LaPant Mot. at 12. Plaintiff counters that a decision in

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Robertson may not issue for more than 14 months, and ongoing litigation costs are not a reason to

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justify a stay. Opp’n at 9.

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The court finds the first two factors weigh against staying this action. Defendants’

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contentions do not warrant a stay. First, although oral argument is set in the Circuit for August

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29, see Robertson, Dkt. No. 57, it is unclear when the Circuit will resolve Robertson. Second, as

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to ongoing litigation costs, the Ninth Circuit has said “being required to defend suit, without
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more, does not constitute a clear case of hardship or inequity within the meaning of Landis.”

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Lockyer, 398 F.3d at 1112. Third, at hearing, the United States contended ongoing and future

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harm would occur should the case be stayed, and delay will thwart its efforts to obtain the right to

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mitigate onsite damage to the property. This factor on balance weighs against a stay.  See id.

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(“[U]nlike the plaintiffs in CMAX and Leyva, who sought only damages for past harm, the

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Attorney General seeks injunctive relief against ongoing and future harm.”).

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As to the orderly course of justice, the court concludes this factor also weighs

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against a stay. Defendants contend a decision in Robertson would clarify issues of CWA

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jurisdiction, which remain in doubt given the pending appeal. LaPant Mot. at 13; Goose Pond

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Mot. at 11. However, when pressed at hearing about the precise effect Robertson would have on

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the defendants’ discovery budget or efforts, or how exactly the Ninth Circuit’s decision might

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narrow defendants’ liability, defendants made only generalized and unsupported assertions.

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Goose Pond’s counsel did say the primary impact would be felt during expert discovery, the

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parameters of which could change significantly if Robertson is decided as defendants hope. At

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hearing the court indicated it would not impose a stay but would entertain a modified schedule for

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expert discovery and trial, to provide more time to assess the potential effects of Robertson; since

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hearing the parties have met and conferred to propose an amended schedule. They now agree to

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complete discovery by July 2018 and to have the case ready for trial by May 2019. See

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ECF No. 46. The court approves of this new schedule, which will facilitate the “orderly course of

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justice” without the entry of a stay. See Leyva, 593 F.2d at 863–64.

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III.

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CONCLUSION
On balance, after weighing the competing interests, the court confirms a stay will

not be imposed and DENIES defendants’ motion to stay.

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This order resolves ECF Nos. 37 and 38.

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IT IS SO ORDERED.

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DATED: June 22, 2017.

UNITED STATES DISTRICT JUDGE

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